Alkaline Water Company Inc (OTCMKTS:WTER) Flies Higher
For the past three sessions the stock of Alkaline Water Company Inc (OTCMKTS:WTER) has been making sizable jumps up the chart. Investors have been rushing towards the company shifting massive amounts of shares. Although yesterday’s traded volume of 317 thousand shares was lower than Wednesday’s volume of 570 thousand shares it was still more than 6 times higher than the monthly average. The heightened buying at the very start of the session pushed WTER to a high of $2.23 but such prices proved to be unsustainable. When the closing bell put an end to trading day the ticker was sitting at $1.99 per share for a gain of 7.57%.
The recent hype around the company has been fueled by a torrent of PRs – just this week we have seen three different press releases being published by WTER in just as many days. Yesterday’s announcement talked about the updated coverage report that was published by Prime Equity Research, LLC. In it the equity research firm gave WTER‘s stock a price target of $3.05 per share. While the disclaimer of the report states that Prime Equity Research do not inform the company in advance about the conclusion of their analysts’ reports the fact remains that they have been paid $30,500 by WTER.
That is why you should always do your own due diligence before putting any of your hard-earned money on the line. WTER may be generating impressive for a pennystock company revenues – for the fiscal year ended March 31, 2016, they expect reporting over $7 million in revenues while for the current fiscal year they project reaching revenue of $18 million, but there are red flags that simply must be taken into consideration.
At the end of 2015 WTER performed a 1-for-50 reverse split that reduced their outstanding shares from 190 million down to 3.7 million and the authorized shares from over 1.1 billion to 22.5 million. Just a couple of weeks later, however, an increase of the authorized shares was approved and WTER can now issue up to 200 million shares. The O/S has also been growing – as of February 22 there were 5.7 million outstanding shares while as a result of the securities offering performed last month currently there are over 14 million outstanding shares.
In addition, investors should note that the 9 million shares that were sold as part of the offering were priced at just $0.33 each. The owners of these shares stand to gain millions in profits if they decide to unleash them on the open market. But that is not all – WTER also issued warrants for the purchase of 4.5 million shares with an exercise price of $0.50 per share.